India plans to pull its tariff regime closer in line with global norms to prepare for new regional trade pacts being negotiated by advanced economies, the government said Wednesday.
India has not been invited to join pacts such as the U.S.-led 12 country Trans-Pacific Partnership (TPP) and is "not in a position to join," partly because its tariffs are not competitive, a top official said at the unveiling of a new five-year trade policy.
"If the country is to stand up to these agreements, it's important that we start to address these issues," Trade Secretary Rajeev Kher said, adding that India's access to markets was likely to erode when such pacts take effect.
Kher said India needed lower tariffs for intermediate goods to help it further integrate with global supply chains, and that these industries would have to become more competitive. He did not give details.
Regional trade pacts are being promoted by advanced economies after years of failure to negotiate a global agreement under the World Trade Organization. TPP would link a dozen Asia-Pacific economies by eliminating trade barriers and harmonizing regulations in a pact covering two-fifths of the world economy and a third of all global trade.
China, which is not part of the TTP negotiations, is pushing for a separate trade liberalization framework.
A third grouping known as the Regional Comprehensive Economic Partnership is made up of the 10 nations of the Association of Southeast Asian Nations plus Australia, China, India, Japan, New Zealand and South Korea. India expects to be "a major beneficiary" of this partnership, "for which negotiations are likely to be completed by year end," Kher said.
Experts said the viability of that grouping might depend on India's progress in easing domestic regulations and external barriers that constrain economic activity.
India aims to raise its exports to $900 billion by fiscal 2019/20, the government said in a statement.
In the first 11 months of the fiscal year to March 2015, merchandise exports stood at $286.58 billion, down from $314.4 billion in the previous year.
